National Jan 8, 2013

U.S. Treasury, IRS propose employer health-care requirements

The Department of the Treasury and the Internal Revenue Service released a notice of proposed rulemaking on the Affordable Care Acts employer requirements under Internal Revenue Code Section 4980H, which takes effect on Jan. 1, 2014. The proposed regulations are intended to provide a comprehensive set of rules upon which employers can rely as they work to comply with the law and mitigate tax liabilities.

The proposed regulations may be relied upon and will remain in effect until final regulations are issued. The administration stressed that any changes to the regulations would be applied prospectively after sufficient time for employers to come into compliance.

The proposed regulations build upon information provided in four previous notices (Notices 2011-36, 2011-73, 2012-17 and 2012-58) and public comments received in response to those notices. The proposed regulations confirm that to avoid the IRC Section 4980H(a) tax penalty, an offer of coverage must be made to full-time employees and their dependents. Dependents, for purposes of IRC Section 4980H, is defined as children younger than 26.

The notice of proposed rulemaking was scheduled for publication in the Jan. 2, 2013, Federal Register, and comments are due by March 18, 2013. In addition, the IRS announced a public hearing on the notice of proposed rulemaking for April 23, 2013. A notice of proposed rulemaking and public hearing can be viewed here.